Greene v. Commonwealth of Ky., s. 2007–SC–000511–DG

Decision Date22 September 2011
Docket NumberNos. 2007–SC–000511–DG,2008–SC–000783–DG.,s. 2007–SC–000511–DG
Citation349 S.W.3d 892
PartiesPatricia GREENE, Thelma Cornelius, Sandy Wood Johnson, Anna Perkins, Dean Wood, Dorothy Wood, Lorella Wood and John C. Wood, Appellants,v.COMMONWEALTH of Kentucky, Administrative Office of the Courts; Honorable Jerry Winchester, Judge of McCreary Circuit Court; Charles E. King; and Kentucky Board of Claims, Appellees.andCommonwealth of Kentucky, Administrative Office of the Courts, Cross–Appellant,v.Patricia Greene, Thelma Cornelius, Sandy Wood Johnson, Anna Perkins, Dean Wood, Dorothy Wood, Lorella Wood, John C. Wood, Honorable Jerry Winchester, Judge of McCreary Circuit Court; Charles E. King; and Kentucky Board of Claims, Cross–Appellees.
CourtSupreme Court of Kentucky

OPINION TEXT STARTS HERE

Philip Gray Fairbanks, Austin Mehr Law Offices, PSC, Lexington, KY, Counsel for Appellant/Cross–Appellee, Patricia Greene.Mendel Austin Mehr, Austin Mehr Law Offices, PSC, Lexington, KY, Counsel for Appellant/Cross–Appellee, Patricia Greene, Appellants/Cross–Appellees, Thelma Cornelius, Sandy Wood Johnson, Anna Perkins, Dean Wood, Dorothy Wood, Lorella Wood and John C. Wood.James Michael Herrick, Assistant Attorney General, Civil and Environmental Law Division, Lisa Kathleen Lang, Assistant Attorney General, Frankfort, KY, Counsel for Appellees/Cross–Appellant, Commonwealth of Kentucky, Administrative Office of the Courts; and Cross–Appellees, Honorable Jerry Winchester, and Charles E. King.George Mitchell Mattingly, Legal Counsel, Board of Claims, Frankfort, KY, Counsel for Appellee, Kentucky Board of Claims.Opinion of the Court by Special Justice RHOADS.

This action is before the Court on discretionary review of whether the Board of Claims had jurisdiction over the Appellants' claims brought against Appellees pursuant to the Kentucky Board of Claims Act, KRS 44.070 et seq. Appellants consist of a group of heirs who were entitled to receive the net proceeds of a judicial sale of four tracts of land previously owned by John and Zola Wood. For reasons explained hereafter, the net proceeds of the judicial sale were never distributed to Appellants, resulting in the Appellants filing claims against Appellees in the Board of Claims. Appellees are (i) Charles E. King, former master commissioner of the McCreary Circuit Court (King); (ii) Circuit Judge Jerry Winchester of the McCreary Circuit Court (Judge Winchester); and (iii) Kentucky's Administrative Office of the Courts (the AOC).

The Board of Claims (the Board) entered a final order dismissing Appellants' claims for lack of jurisdiction. The Franklin Circuit Court and the Court of Appeals affirmed. This Court now reverses for the reasons set forth in this opinion.

I. Background

On May 11, 1987, Judge Winchester appointed King as the master commissioner for McCreary County pursuant to KRS 31A.010. A master commissioner serves at the pleasure of the circuit judge, except that no term of appointment shall exceed four years without reappointment by the circuit judge. KRS 31A.010(3)(a). KRS 31A.020 requires that the master commissioner execute a bond with surety approved by the court (i.e., the circuit judge). In this case, at the time of Judge Winchester's appointment of King, Judge Winchester ordered that King execute a bond in the amount of $25,000.00, which King did.

At the end of the four-year term, Judge Winchester did not reappoint King as master commissioner, nor did he appoint anyone else to the office. Nevertheless, King continued to act as, and was treated by Judge Winchester as the master commissioner for the ensuing period of more than ten years. In essence, King was acting as the de facto master commissioner for McCreary County when the events which gave rise to this matter transpired.

On August 19, 2002, Judge Winchester, in the course of a proceeding before the McCreary Circuit Court, ordered King, as master commissioner, to conduct a judicial sale of four tracts of land so that the proceeds could be distributed among the Appellants. King proceeded to sell the property at auction on September 21, 2002 for $234,600. King's Report of Sale dated October 11, 2002, was approved and confirmed by the McCreary Circuit Court on October 22, 2002. The court, on January 2, 2003, approved an itemization of disbursements, which included administrative fees and costs, the amounts due to the respective heirs. The court's order also directed King to distribute the proceeds of the sale in accordance with the itemization. King did not comply, and therefore, the court ordered King to make an immediate distribution of the proceeds by an order entered on January 21, 2003. King, however, never made any disbursement.

As a result of King's failure to disburse the proceeds pursuant to his orders, Judge Winchester ordered an accounting of King's funds. An investigation revealed that [w]hile acting as Master Commissioner for McCreary Circuit Court, King misappropriated the proceeds from numerous separate sales by transferring funds from the Master Commissioner's account to his own personal account instead of to the rightful beneficiaries. The aggregate value of the misappropriated funds exceeded $300,000.” King v. Kentucky Bar Ass'n, 162 S.W.3d 462, 462 (Ky.2005).

King's wrongs were not without additional consequences. Numerous criminal charges were filed against him, and in 2005, he pleaded guilty to 132 counts of theft by failure to make required disposition of property valued at over $300. This, in turn, led this Court to permanently disbar King later that same year. Id.

In the interim, Appellants each filed substantially identical claims with the Board of Claims naming King and Judge Winchester as the state actors, and the AOC as the state agency on August 11, 2003.1 The Board of Claims consolidated the claims into a single action by an order entered on October 16, 2003.

A. Allegations Regarding the AOC at the Board of Claims Level

Appellants and Appellees have made various allegations regarding the designation of King and Judge Winchester as employees of the AOC. Although the Court does not consider the resolution of this appeal to turn upon which party either first or more emphatically asserted that King and Judge Winchester were employees of the AOC, the Court briefly sifts through the competing allegations because the parties expend considerable effort in arguing the point. Further, some discussion of the issue may clarify the principles which are dispositive of this appeal.

Appellants assert that their claims “were filed against the Commonwealth based on its waiver of immunity through the Board of Claims Act for King's and Judge Winchester's failure to perform the duties of their official capacities. (Emphasis added.) The claim forms submitted by Appellants, which they maintain were provided to them by the Board, included a section designated Name of State Agency involved with the incident (employee's name, if known).” Appellants, in their completion of the form, stated:

Administrative Office of the Court [sic]

1) Charles E. King former Master Commissioner of the McCreary Circuit Court

2) Judge Jerry Winchester of the McCreary Circuit Court

(Emphasis added.)

Appellants point to the Board's responses to the claims on September 15, 2003, which stated that [a] copy of your claim and all of the information you have provided the Board is being forwarded to the Administrative Office of the Courts.” The record establishes that the Board directed a letter to the AOC on that same date assigning the claim to the AOC, with the Board directing that [y]our agency shall file its answer with the board and shall submit a copy of the answer to the claimant.” AOC answered the consolidated claims of the heirs on October 10, 2003.

For its part, the AOC argues that various statements identified in its own filings were merely recognitions of the Appellants' filings and that [t]he suggestion that King and Winchester were employed by AOC originated entirely from the Appellants, not from AOC.” Appellants retort that, as an example of the AOC's acknowledgement that it was the employer of King and Judge Winchester, the AOC, in its Answer, pleaded that “this pleading is filed on behalf of [Judge Winchester and King] and their state employer, AOC.”

It should suffice to say that both parties have made allegations in claim forms or pleadings which allege explicitly or implicitly that the AOC is the employer of King and Judge Winchester. Regardless, the Court does not consider these arguments to contribute toward its decision of this case. For the reasons stated hereafter, the Court looks to the Kentucky Constitution and relevant statutes for its determination regarding whether Judge Winchester is an employee of the AOC, and finds that the factual circumstances of the case make a decision on this point regarding King moot and unnecessary.

B. The Board of Claims Decision

The AOC, after filing its answer with the Board of Claims, moved the Board to grant summary judgment, arguing that the Appellants had failed to state a claim for which relief could be granted. The AOC's failure-to-state-a-claim argument was that the judge's failure to reappoint the master commissioner could not have caused the injury complained of and that the judge had no obligation to ensure that the master commissioner's bond was sufficient to cover the complete value of all properties that he sold. The AOC, in its argument based upon jurisdiction, contended that King, Judge Winchester, and the AOC were all engaged in judicial or quasi-judicial functions' for which no liability can exist because such functions are entitled to absolute immunity.

The Board granted the AOC's motion for summary judgment, stating that the Appellants' claims were “dismissed for failure to state a claim upon which relief can be granted within the Board of Claims Act at KRS Chapter 44. Therefore, the Board of Claims lacks jurisdiction in this matter.” The Board's order was summary,...

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